LONDON, Oct 12 (Reuters) - If the 40-year wave of
globalization is now giving way to a rising tide of
protectionism, the outlook for national and regional champions
is brightening.

These companies are most likely to be in sectors that enjoy
explicit if not implicit government backing, and are those best
positioned to increase domestic market share in a world where
barriers to trade and markets are going up, not coming down.

Early signs of these trends may already be starting to
emerge as the de-globalization drift deepens, with the Trump
administration's "America First" world view sowing doubt over
how global trade will evolve in the years and decades ahead.

It's almost a year since Donald Trump's shock U.S. election
win. In that time he has withdrawn the United States from the
Trans-Pacific Partnership (TPP), threatened to withdraw from the
North American Free Trade Agreement (NAFTA) and chided Germany
for its huge trade surplus.

And at a micro level a trade dispute between Boeing
and Bombardier threatens thousands of jobs at the
Canadian planemaker' s plant in Northern Ireland. UK prime
minister Theresa May has spoken to Trump about the issue.

With Trump turning up the protectionist rhetoric, French
President Emmanuel Macron has vowed to make it more difficult
for foreign takeovers in strategic European industries, warning
European Union governments to guard against "naivety" in global
trade.

Last month Paris and Rome said they will explore the
creation of a Franco-Italian naval defence group, merging French
military shipyards company Naval Group with Italian shipbuilder
Fincantieri.

Germany's Siemens and France's Alstom
also announced last month they would merge their rail
businesses, creating a European champion to help counter the
rise of China's state-owned CRRC.

Merger and acquisition data from Thomson Reuters show the
value of intra- and inter-EU deals in the nine months to
September jumped 68 percent to $344 billion, the highest since
2008.

The value of inward M&A into Europe from overseas also rose
Jan-Sept, but nowhere near as much. It edged up 1 percent to
$178 billion, only the highest since 2015, and inbound flows
excluding Chinese acquisitions rose 4 percent to $153 billion,
also just a two-year high.

The picture in the United States is a little less clear cut,
but still points to a general trend of home-grown deal-making.

The value of U.S. domestic M&A rose 6 percent in the first
nine months of 2017 to $690 billion, again the highest in just
two years. But the number of domestically-focused deals jumped
21.8 percent to 7,846, the most since 1998 and the second
highest ever.

"These are the firms that will see a rise in domestic market
share and enjoy possible government support," he said. "M&A is
likely to be more intra-regional, especially in Europe. Until
recently, Europe was a collection of countries. But people now,
including EU policymakers, see a more pan-Europe."

O'Sullivan expects cross-border ventures in European
technology and rail to spread. Banking, he said, is ripe for
consolidation over the next five years, particularly among the
big European banks with strong balance sheets.

Deutsche Bank analysts argue that last year marked the "the
peak, and likely unwind of globalization" that has driven and
shaped the world economy since World War Two. There is
"compelling evidence" that the freedom of movement of goods,
people and capital across the globe are all being reversed.

The shift towards unilateralism is most prevalent in places
that have been the biggest drivers of globalization.

Global Trade Alert, which monitors state interventions, says
the United States has implemented 214 "harmful" trade measures
over the last two years. That's more than any other country by
far, and more than double second-placed India, which has adopted
105 protectionist measures.

Britain, Italy, Germany and France were all in the top 10,
while China was in 11th place. (http://www.globaltradealert.org)